Bridgewater Associates, the world's largest hedge fund, was once again buying in bulk during the last quarter of 2022. Although there were several purchases, investors were particularly interested in increasing their positions in AMC and GME.

Meme stock for Bridgewater

''Period 13F'' once again reveals to us the actions of the biggest and most influential investors and funds. Every quarter, the U.S. Securities and Exchange Commission (SEC) requires institutional investors to file these forms disclosing past sales and purchases.

According to the latest 13F filing by Bridgewater Associates - the world's largest hedge fund - Ray Dalio significantly increased his positions in two meme stocks during the last quarter of 2022.

Bridgewater boosted its GameStop $GME+0.8% position - the fund added 25,408 shares, bringing its total to 38,561.

The fund also added about 42,541 shares of AMC Entertainment $AMC+0.8% - bringing its total to 64,122 shares.

Bridgewater is a relative newcomer to meme stocks - the fund didn't own a single GameStop or AMC share until March 2022.

Dalio's meme stock positions are small compared to the rest of his positions 👇

To a retail investor, 42,541 shares of GameStop and 64,122 shares of AMC may seem like a huge amount. But for a fund the size of Bridgewater, it's a mere drop in the ocean.

Ray Dalio's fund currently has estimated assets under management (AUM) of $235 billion. That means that GME and AMC's holdings, which together have a market value of about $1 million, represent only 0.001% of Bridgewater's total fund value.

In other words, investors in meme stocks shouldn't get too excited about Bridgewater's increased positions. Their insignificant size suggests that this is not a sign that Dalio is interested in making a big bet on meme stocks.

Why did Dalio's fund pick GameStop and AMC?

While Bridgewater's purchases of GameStop and AMC are insignificant compared to the fund's overall holdings, you can't deny that a "long" call on a meme stock is unusual.

Bridgewater uses a macro strategy. That is, the fund generally does not seek to profit by investing in just one specific company, but rather by taking advantage of broader movements around interest rates, foreign exchange and equities.

When Bridgewater buys individual stocks, it is likely that the fund is looking for some exposure to a particular theme. In the past, for example, it has bought shares of Alibaba $BABA+1.5% - Get Free Report for exposure to the Chinese market - not necessarily as a bet on Alibaba itself. (It's worth noting that Bridgewater has since liquidated its entire BABA position.)

We can speculate that Bridgewater is building positions in GameStop and AMC to at least expose the fund to its new role as a retail investor in the markets. As the two most prominent stocks in the "meme stock mania," GME and AMC would be obvious choices to do this.

• Are you surprised by the fund's moves?
• Do you invest in meme stocks?

Please note that this is not financial advice. Every investment must go through a thorough analysis.